US SEC Investigates Coinbase Staking Products

The US Security and Exchange Commission (SEC) has many probes going on against the crypto exchange, Coinbase. The latest allegation is that the exchange stakes products. Coinbase also confirms that its staking product is currently being investigated by the SEC along with some other products.

Regulators Dig Deep

The crypto exchange firm’s confirmation was contained in its quarterly statement. It was mentioned there that the firm has got some investigation subpoenas and questions from the US SEC. 


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The questions relate to some operations, programs, and current and planned products for the future. The statement said the Commission also requested the firm’s procedure for listing any assets, its staking program, as well as yield-giving programs. 

As contained in the shareholders’ letter Coinbase sent out on the 9th of August, regulators sent in voluntary information requests in May. But it is not known if the request will become formal and lead to a full investigation.

The Coinbase letter to its shareholders has it that the firm frequently gets both formal and non-formal requests from regulators. It said the requests and questions could be about the firm’s opinion about certain developments in the crypto sector, operations, and products.

Coinbase has singled out staking as a high-reward area in the crypto business. It recently issued a statement that it will soon begin to offer Ethereum staking for any interested institutional investor.

The firm declared a net loss of $1.09 billion in the second quarter of this year. It has been struggling hard in the market due to the crash, as well as a number of other reasons.

Assuring Clients

The commissions the firm earned from accounts that staked crypto in the second quarter accounted for about 8.5% of its total revenue in that quarter. Now, the Security and Exchange Commission’s investigation might be a clog in the wheel of the program’s development.

Whereas this newly opened chapter is just an addition to the heap of cases and regulatory obstacles that Coinbase is dealing with. The SEC is equally investigating Coinbase for allegedly trading non-registered securities.

Aside from that, the firm is involved in at least five other lawsuits. The suits have the potential of morphing into class actions with different causes. They all range from not giving customers sufficient information to completely misleading them.

Importantly, Coinbase wrote in its shareholders’ letter that the current investigation would have no effect on its financial situation. 


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